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THE MINISTRY OF FINANCE - THE MINISTRY OF CULTURE AND INFORMATION

JOINT CIRCULAR No.32/2000/TTLT/BTC-BVHTT OF APRIL 26, 2000 GUIDING THE FINANCIAL MANAGEMENT REGIME APPLICABLE TO NON-PUBLIC ESTABLISHMENTS OPERATING IN THE FIELD OF CULTURE

Pursuant to the Government’s Resolution No.90/CP of August 21, 1997 on the direction and policy of socialization of educational, healthcare and cultural activities;

Pursuant to the Government’s Decree No.73/1999/ND-CP of August 19, 1999 on policies of encouraging the socialization of activities in the fields of education, healthcare, culture and sport;

In order to unify the work of financial management over non-public establishments operating in the cultural field; the Ministry of Finance and the Ministry of Culture and Information hereby guide the financial management regime as follows:

Part I

GENERAL PROVISIONS

1. Non-public establishments operating in the cultural field are units established and operating along the socialization policy, which is aimed at mobilizing the entire society’s participation in and contribution to the development of cultural cause.

2. Non-public cultural establishments shall operate on principles of non-profit, self-financing and raising quality of products. In the operation course, if an establishment’s revenues are larger than its expenses, it shall be allowed to use the difference to consolidate its material base, set up reward and welfare funds, in order to raise the material and spiritual life of its employees.

3. Non-public cultural establishments shall have to organize the financial management, cost-accounting and accountancy in compatibility with each type prescribed by the State, submit to the inspection and control by the competent State agencies and may open accounts at commercial banks or State Treasury for its transactions.

4. Non-public establishments operating in the cultural field shall be entitled to preferential policies provided for establishments practicing socialization of activities under the provisions of the Finance Ministry’s Circular No.18/2000/TT-BTC of March 1st, 2000 guiding a number of articles of the Government’s Decree No.73/1999/ND-CP of August 19, 1999 on the financial incentive regime applicable to non-public establishments operating in the fields of education, healthcare, culture and sport.

Part II

SPECIFIC PROVISIONS

I. TYPES OF NON-PUBLIC CULTURAL ESTABLISHMENTS

Non-public cultural establishments shall be organized in the following forms:

- Establishments conducting art activities;

- Establishments conducting conservation and museum activities;

- Establishments conducting library activities;

- Establishments conducting grassroots information activities;

- Establishments conducting cinematographic activities;

- Establishments providing copyright consultancy services.

The above-said non-public cultural establishments shall operate in the following three types:

1. Semi-public cultural establishments:

- Semi-public cultural establishments shall be founded on the basis of the partnership between State organizations and non-State organizations and/or individuals of all economic sectors in the country to set up new semi-public establishments or transform the existing public material bases for joint investment in building of infrastructure, equipment and facilities, and jointly manage and administer all activities of such establishments according to the provisions of law.

- Public cultural establishments with semi-public sections means the partnership between State organizations and non-State organizations and/or individuals of all economic sectors in the country in order to build or upgrade the material bases of certain sections of such public establishments, and to jointly manage and administer activities of such semi-public sections according to provisions of law.

2. People-founded cultural establishments: Are those founded by organizations with investment capital outside the State budget sources (capital of organizations, collectives and/or individuals), which shall manage and administer all activities of such establishments according to provisions of law.

3. Private cultural establishments: Are those founded, managed and administered by individuals or family households according to provisions of law.

The conditions, dossiers and procedures for founding non-public cultural establishments shall comply with the Ministry of Culture and Information’s guidance.

II. THE FINANCIAL MANAGEMENT OF NON-PUBLIC CULTURAL ESTABLISHMENTS

1. Operation funds

- The State budget source: For semi-public establishments, financial source contributed by the State shall include:

+ Value of material bases initially equipped and those newly invested during the operation course;

+ Amounts remittable to the State budget which are left to them.

- Financial assistance, aids, donations, gifts from organizations and individuals inside and outside the country;

- Capital contributed by organizations and individuals for investment in, building of new material bases or renovation, expansion and upgrading of the existing ones;

- Capital borrowed from banks and credit institutions (if any).

2. Revenue and expenditure contents:

a/ Revenues:

- Revenue sources at establishments:

+ Ticket sale proceeds;

+ Rentals from leasing material facilities (if any);

+ Revenues generated from cooperation or partnership contracts with other units;

+ Revenues from non-business cultural services provided at prices agreed upon by the service providing units and service beneficiaries;

+ Bank deposit interests (if any);

+ Proceeds from the liquidation of assets created by capital sources of establishments;

- Other revenues (if any).

b/ Expenditures:

- Wages, remuneration, bonuses and contributions according to the prescribed regimes such as social insurance and medical insurance premiums, trade union’s operating funds paid on the laborers’ behalf;

- Remuneration for collaborators (if any);

- Royalties and funds for composition activities;

- Administrative management expenses (official duty expense, conference expense, working trip expenses...);

- Expenses for professional and specialized activities of each type of public-service cultural activities;

- Expenses for renting of material facilities (if any);

- Expenses for procurement and repair of fixed assets and equipment and facilities in service of establishments’ activities;

- Payment of borrowed capital interests (if any);

- Expenses for performance of obligations toward the State (if any);

- Payment of interest on contributed capital;

- Fixed asset depreciation;

- Other expenses.

3. Financial management regime:

3.1. For semi-public establishments:

1. Management and use of capital and assets:

The process of financial management of semi-public cultural establishments must be based on the principle of clearly and publicly distinguishing the capital source invested by the State budget from mobilized sources outside the State budget.

a/ The State’s contributed capital includes capital in cash, supplies and goods, fixed assets (houses, land, machinery and equipment, means of transport and other assets...) provided as initial equipment and handed over during the operation course by the State. Semi-public cultural establishments shall organize the inventory and re-assessment of the whole capital part contributed by the State, then send written reports thereon to their managing agencies for consideration, approval and submission to the finance agencies of the same level, so that the latter can carry out the procedures for handing over the State’s assets and capital to such semi-public cultural establishments. The inventory, re-assessment and hand-over of assets, supplies and capital shall comply with the current provisions of law. Annually, the semi-public establishments shall organize the inventory and re-assessment of their assets’ value, then report to their managing agencies and finance agencies of the same level, clearly indicating those assets which are added from the State’s contributed capital left to such units.

b/ Funding sources allocated by the State budget for execution and materialization of programs, targets, subjects and projects shall be managed and used according to the competent authorities’ approval. Quarterly, reports on the execution tempo as well as fund reception and expenditures shall be addressed to their superior managing bodies.

c/ Capital contributed by non-State organizations and/or individuals of all economic sectors; and borrowed capital shall be managed and used for the right purposes according to projects already approved by the competent authorities.

d/ The assignment, liquidation, mortgage and pledge of assets included in the State’s capital source must be decided by the superior managing bodies after obtaining written opinions of the finance agencies of the same level. The semi-public establishments are entitled to assign or sell their redundant assets or technically obsolete assets to retrieve capital for use as supplement to their financial sources for operations. Before selling such assets, the establishments shall have to set up price-determining councils and organize auctions thereof according to provisions of law.

e/ Semi-public establishments are entitled to take the initiative in and responsible before law for the assignment, liquidation, mortgage and/or pledge of assets not belonging to the State’s contributed capital.

f/ Fixed asset depreciation shall be left as supplementary capital for the units to consolidate their material bases. In special cases, the head of a semi-public unit may set out and apply a quick depreciation rate suitable to the solvency of service beneficiaries.

2. Semi-public non-business cultural establishments shall be entitled to apply the revenue-expenditure regime applicable to public establishments or according to agreements reached with cultural service beneficiaries. Annually, semi-public cultural establishments shall draft revenue-expenditure estimates according to their generation sources and, after having such estimates approved by their management boards, submit them to the superior managing bodies for synthesization and forwarding to the finance agencies of the same level.

3. Semi-public cultural establishments shall have to organize accounting work, make estimates, implement and report on final financial settlement according to the current accounting and financial regime.

4. Semi-public cultural establishments shall conduct the regular financial examination and inspection of their use of funds; publicize their revenues, expenditures and incomes distributed to their laborers, the situation of asset increase or decrease depending on the State capital sources and non-budgetary mobilized sources.

5. The establishments’ heads shall be their accounts’ holders and be answerable to the management boards and the direct managing bodies for the entire work of managing the establishments’ finance and assets.

6. Annual fiscal results of semi-public establishments operating in the cultural domain shall be determined between their total revenues and total expenditures in the fiscal year.

The semi-public cultural establishments’ surplus revenue-expenditure difference shall be spent at specific rates on the following under their management boards’ decisions:

- Supplementing their operation funds;

- Consolidating their material bases;

- Giving rewards, bonuses (incentives) and welfare to their laborers and subjects directly undertaking cooperation with the units;

- Distributing incomes generated from the capital sources contributed by the State, collectives and individuals. Particularly, establishments may withhold yields from the State’s contributed capital to invest in consolidating material bases and account them as increase to the State’s contributed capital.

3.2. For people-founded establishments:

People-founded cultural establishments shall apply the financial management mechanism applicable to semi-public establishments to organize the management of their finance.

Annually, the management boards shall adopt the revenue-expenditure estimates and prescribe the ratio between the regular expenditures and investments; ratio between expenditures for people and for operations; set the rate of interest to be paid to capital-contributing organizations and individuals according to their capital contribution proportions.

People-founded establishments shall make quarterly and annual reports on revenue-expenditure settlement; the situation on capital and asset increase and decrease, according to the current regulations and submit them to the management boards for approval.

3.3. For private establishments:

Private cultural establishments shall take the initiative in organizing their activities and be responsible before law for their financial and other activities.

3.4. Settlement of financial matters upon the establishments’ dissolution or bankruptcy

When a non-public cultural establishment is declared bankrupt or dissolved, the financial matters shall be settled according to the following priority order:

- Expenses as prescribed by law for the carrying out of the establishment’s dissolution or bankruptcy.

- Arrears of wage, severance allowances, social insurance according to provisions of law and other benefits according to the already signed collective labor agreements and labor contracts.

- Tax arrears.

- Debts owed to creditors on the list of creditors:

+ If the value of the establishment’s remaining assets is enough to pay all debts to creditors, each creditor shall have his/her/its debts fully paid.

+ If the value of the establishment’s remaining assets is not enough to pay all debts to creditors, each creditor shall have only part of his/her/its debts paid according to his/her/its proportion in the whole debt amount.

- If the value of the establishment’s remaining assets is larger than that of all debts owed to creditors, the surplus shall go to:

+ The establishment owner, for private establishments;

+ The establishment’s members (including the State budget), for semi-public establishments and people-founded establishments.

Part III

ORGANIZATION OF IMPLEMENTATION

This Circular takes effect 15 days after its signing.

Any problems arising in the course of implementation should be promptly reported to the Ministry of Culture and Information and the Ministry of Finance for consideration and appropriate amendments and supplements.

For the Minister of Finance

Vice Minister
NGUYEN THI KIM NGAN

For the Minister of Culture and Information

Vice Minister
NGUYEN TRUNG KIEN